This article complements the earlier work by Mayers and Smith (1987) and Schnabel and Roumi (1989) which showed that a property insurance contract could be used to bond subsequent corporate investment decisions. Although these models suggest one possible approach to solving the underinvestment...

This paper additionally incorporates the random decision behaviors of the decision-maker, in addiction to the randomness in the risky assets, into the decision-making process. Our work to this point is to investigate a multi-period mean–variance portfolio optimization under the assumption that...